Superlife bonus terms revealed, ETF super-seeding begins

February 23, 2015

The NZX will hand over its first bonus payment of $5 million to Superlife’s former owners if the unit retains funds under management (FUM) at current levels for a year.

According to an NZX presentation accompanying the release of its annual results last week, the group will pay out $5 million to Superlife’s ex owners (split 50/50 between family interests associated with Michael Chamberlain and Owen Nash) if its “FUM exceeds $1.207b for a period of twelve consecutive months”.

As at January 31 this year, Superlife’s FUM owned by NZX stood at $1.265 billion, comprising $872 million in employer super and $393 million in the firm’s KiwiSaver scheme.

The stock exchange would also further pay a maximum of $10 million if Superlife’s FUM “exceeds $1.57b” at December 31, 2017 – equating to 11 per cent compound annual growth.

“No additional amount is payable if FUM is less than $1.41b at 31 December 2017 (equivalent to a 7% compound annual growth rate),” the NZX document says. “… Partial payment of the earnout amount will result if FUM at 31 December 2017 is between $1.41m and $1.57m.”

Over the year to March 31, 2014, Superlife grew its KiwiSaver FUM by 22 per cent. The Superlife superannuation fund reported assets of about $1.15 billion as at March 2014, and increase of 12.6 per cent compared to the 2013 figure. (The NZX excluded the assets of defined benefit schemes from its purchase of Superlife’s superannuation funds.)

In a 50/50 cash/shares deal the NZX paid $20 million upfront for Superlife last December. Superlife reported a loss of just over $20,000 in the year to June 2014 on revenue of $5.7 million and wage costs of $4.5 million, according to its latest financial statements.

Tim Bennett, NZX chief, said last year it was also likely the group would merge its existing SmartKiwi KiwiSaver with the Superlife scheme. SmartKiwi reported about 1,400 members and $36.5 million in FUM as at the end of December last year.

In January this year, Superlife also launched three new investment mix options (smartConservative, smartBalanced and smartGrowth) and two new sector products – the Superlife SmartFONZ and Superlife SmartMOZY – in both its superannuation and KiwiSaver schemes. The NZX recently rebranded its ETFs, with SmartFONZ and SmartMOZY now known as the ‘NZ Top 50’ and the ‘Australian Mid Cap’ funds respectively.

The Smartshares range also has a reasonably complex back-office arrangement: BNP Paribas provides custody and admin to the two new Australian ETFs with Trustees Executors (TE) as trustee; JB Were is custodian for the five older Smartshares products, which feature TE as trustee for the SmatMIDZ and SmartOZZY funds and Guardian Trust filling that role in the three remaining ETFs.